We need to innovate! Are you tired of hearing that? I am- not because the sentiment is wrong, but because those saying it often have not a clue as to what to do- or, in many cases, what is innovation. I discussed this, as have many others. (Innovation needs innovators, Go and Create, Innovation is the key, among others of my posts that cover this topic. Use the search feature on the right of my blog, looking for ‘innovat’ and you will find many more.)
Yes, our government wants to spur innovation. And, it spends money doing so. And, given the apparent small return, many politicians claim that it’s a waste of money. But, there are two problems with that analysis. The first is it is not clear we (or anyone else) have an innovation-meter. And, the spending of R&D dollars does not have a 1:1 correlation with innovative development.
The latter is something often glossed over. First, we have to recognize that many firms have large R&D budgets- and really don’t spend that on true ‘research’ or ‘development’, but on minor product improvements. (That “new” and “improved” really is often just new packaging.) Part of that definition is related to our tax code- you see, R&D is considered a capital expense (which means it must be depreciated over a set number of years)- except now we have a special R&D tax credit, which is a reduction in taxes owed to the government. (This is not a tax discussion- but this credit can be transferred, taken retroactively, or carried forward for 20 years.)
Let’s consider a few facts. Most healthcare firms spend a lot of money on R&D; it’s almost part of their charter. And, the 5 companies that spent the most on R&D in 2010 were Microsoft (4), Roche (1), Pfizer (2), Novartis (3), and Merck (5). Think about that- how many of these firms do you consider innovative? In the overall scheme of things, Pfizer is 16th and Microsoft is 5th. The others are much lower. Part of that reason is that it takes much longer for their company’s products to come to market.
But, it’s also true that it’s harder to innovate at a larger company. Bureaucracy is part of the problem, but the bigger reason is the culture of the organization- failure is a big issue. And, to develop something new, you will fail. The old saw about Edison and the light bulb (he did NOT invent the light bulb) is that he tested thousands of materials before he found the filament he wanted proved only that he was the king of empirical approach. But, it is true that much testing leads to the wrong thing. But, sometimes that wrong thing is the absolute best new product for something else (think 3M).
Companies like Intel and Apple thrived under Andy Grove (PhD, Chem E) and Steve Jobs (degree-less) because innovation was encouraged under their stewardship. Failure was used as a learning experience- and shared among others so that the reasons for failure and what the failure taught could lead to improvements for others, as well.
The best way to innovate is to align your strategy with innovation and to provide support to innovators in your organization. If you are part of an organization of 1 to 5 people, then this is a breeze. Because it’s probably true that you believe it in your heart and soul, as do your compatriots. And, you’re all in this together.
Maintaining and fostering that spirit becomes a lot harder as the organization grows. And, that’s the trick- to insure that the spirit thrives. That’s why they are called “leaders”.
Unfortunately, not everyone can be a true thought leader at the top of their organization. Innovation is not only a mindset but a way of thinking that comes more naturally to some – and is completely missing in others. I totally agree that innovation is what will spur companies forward; and I’m not referring to new packaging. As a freelancer, being innovative can be difficult because I work alone and can spin endlessly in my own head. To innovate at the small level, it helps to have others to confide or counsel with (like a mastermind group) to keep mental juices flowing and consider new, fresh ideas. Great post as always, Roy!
Lisbeth,
I am thrilled you dropped in and left your comments.
It is difficult to try and innovate- alone or in a group. It’s not only the mindset, it’s also the setting. I don’t mean going to an exotic location (although that could help). I mean finding the interaction with others, so you can always discern the “other”, what others think about things you see. By seeing and understanding their point of view, your vista is expanded and you can use that expanded view to provide a creative solution.
Again, Thanks!
Roy
Love this. One thing I’m re-learning constantly is to let others do what they do best and support them in that. Some people are great an innovation and if we’ll step back and let them have at it, it’s amazing what they can create.
Absolutely spot-on, Michelle!
Letting folks do what they do best means they are free to succeed or fail- which leads to creative expression.
Thanks for that share.
Roy
My husband has worked in product research for a large company for many years. The company is willing to invest time, talent and money into their research and development program. They have been rewarded for their efforts.
So glad to hear that, Janette!
That’s what makes America- or any other country- great.
Roy
Now that is one of the best definition of leader – I like and support
Touche, Roberta!
Your explanation Roy really explains how leadership, once again, seems to be a major factor in progressing with innovation. I’m not as knowledgable as you are in this and the stats you share are eye opening. I think it is very important to support those that have the motivation and desire to invent to continue to do so. So thank you for sharing this information.
Glad you enjoyed the post, Lynn.
We need to recognize that we need to provide the setting and the motivation to innovate- and produce.
Roy
I hadn’t thought about this, Roy! I loved your example of Edison failing many times and I certainly wouldn’t feel the same kind of freedom I associate with innovation if I worked for a company and was constantly being reminded of all the dollars going to waste as I get my creative juices flowing. =P
Glad you found something useful, Samantha!
And, may your employment always be with firms that understand that failure leads to tremendous successes.
Roy